Original Medicare

When you keep your Original Medicare, you are using the original fee for service Medicare program, administered by the federal government.

This gives you access to most of the nation’s hospitals and doctors, with no need for a referral from your primary care doctor.

You may add an optional drug plan, as well as an add-on Medigap policy.

What is Medicare Advantage again?

Medicare Advantage is a part of medicare that is regulated by the Centers for Medicare and Medicaid Services (CMS), but your Medicare benefits are administered through a private insurance company.

The available plans and companies vary by zip code, and may offer extra benefits that Medicare doesn’t cover, such as vision or dental. Medicare Advantage plans are known for their very low, or zero additional premiums (over and above Medicare Part B).

The extra benefits for a low premium come at a cost: these plans have a restricted network of providers, and may change year to year.

A Medigap policy costs you a monthly premium to cover your Original Medicare cost-sharing.

With a Medigap policy you have the same freedom you have with Original Medicare, to see most providers in the U.S.

As long as a provider accepts Medicare, they will accept your Medigap policy, regardless of the carrier.

Let’s revisit the Medicare options flow chart.

Here’s the visual:

You can see above that you either keep Original Medicare or choose Medicare Advantage.

It’s only with Original Medicare that you add on a stand-alone drug plan (optional), and a Medigap policy.

Medicare Advantage plans typically include drug coverage.

Now for the HOW. How do you choose the right plan for you?

Just because you know all of the above, doesn’t mean it’s easy to choose.

Ask yourself these three questions:

Do you cringe at the thought of having restrictions to see any doctor you want?

How important is your budget?

Would you pay more for predictability?

Use your gut. – you are the one that has to live with your decision.

When you ask yourself the above questions, how does it make you feel?

Think about your comfort level and what helps you sleep at night.

1.) Do you cringe at the thought of having restrictions to see any doctor you want?

Or, do you cringe even more at the thought of paying an extra monthly premium over and above your Medicare Part B?

Not only do you need to ask yourself what’s important, but your gut will tell you what’s MOST important.

Sure, everyone would like the freedom to see any doctor they’d like, but if it’s going to leave you feeling strapped for cash every single month, you may want to consider a Medicare Advantage plan.

If you can’t bring yourself to pay $100+ extra dollars per month for a Medigap policy and you don’t mind the limitations of an HMO, Medicare Advantage is probably for you.

But, if freedom is your #1 priority, and you want extra protection, Medigap is a no brainer if your budget allows for it.

Also consider when you might need this freedom: some people wait to enroll in Medigap, thinking they can enroll 5 or ten years later when they will need it most.

This is a mistake because your eligibility won’t be guaranteed.

What to watch out for:

Keep in mind that after 6 months on Medicare Part B you lose your guaranteed right to a Medigap policy!

You’ll have to answer the medical questions if you wait.

If you think you’d want to have all the benefits of a Medigap policy down the road, the only way to guarantee it is to get one while you are healthy.

2.) How important is your budget?

Maybe you have the money to pay for a Medigap policy, but just the thought of shelling out a monthly premium STILL makes you uneasy.

Or maybe the freedom and security of a Medigap policy are so important to you, that the value far outweighs the monthly cost.

This is a very personal decision, and it’s a wonderful thing that you have the choice.

There’s no right or wrong answer once you learn to listen to your needs, and the decisions that create peace of mind for YOU.

Every plan isn’t right for everybody.

It’s not always about monthly cost, it’s about what YOU need, and what you value the most.

3.) Would you pay more for predictability?

I’m bringing up predictability because Medicare Advantage plans are known to change over time. Doctor networks change, out of pocket maximums change, copays change.

The benefits of Medigap plans don’t change over time, however, the premiums do go up.

Nothing is 100% predictable, but if you value predictability, Original Medicare plus a Medigap plan will be more predictable than a Medicare Advantage plan.

FAQ

What about employer coverage?

Question: I’m still working – how does Medicare coordinate with my job’s health insurance?

Many employer health insurance plans will pay secondary to Medicare.

It’s in your best interest to contact the benefits administrator to find out exactly how Medicare will coordinate with your particular employer health benefits plan.

Some companies encourage or require you to enroll in Medicare when you become eligible, and others make it optional.

If your company provides excellent health benefits, you may find out about postposing your enrollment in Medicare Part B.

What to watch out for

If you are 65 or older and your employment ends, you only have 8 months to sign up for Medicare Part B (even if you choose COBRA – a federal law that allows you to continue your employer health insurance for a limited time)!

In other words, COBRA doesn’t exempt you from the Part B penalty, like group health insurance does.

I’ve seen many people mistakenly think they are OK because they are still on their group plan after ending employment, only to end up with a delay of Part B benefits, and a penalty.

Question : “My employer is offering a retiree Medicare plan. Is that the same as a Medigap Policy?’

Retiree Medicare plans are not the same as Medicare plans for individuals.

Companies sometimes opt to offer a retiree package so that an employee can roll their coverage over into the Medicare plan seamlessly upon retirement. The benefits administrator may help explain Medicare and give you your options.

Companies may offer a Medigap policy or a Medicare Advantage plan that is unique to the company.

It is common for employers to offer drug coverage that is different from the individual options, so make sure to compare so you don’t lose a good thing you may never get back.

The biggest benefit of going this route is usually convenience, because people dread learning about Medicare and researching and choosing an option.

If their company has always offered good health insurance, employees often assume that the retiree coverage is going to be the best deal.

But I’ve seen many examples of retiree Medicare benefit packages that were way more pricey than getting an individual plan.

I’ve talked to folks that had no idea what kind of plan they had, and how much better their benefits could be, for less money.

There is the rare occasion where your employer could offer a package that is better than what you could get on your own.

The point is, check out ALL your options.

An agent can help you compare your employer plan with all the individual Medicare options available to you.

Question: What about Military coverage? Do I need Medicare, or a supplement?

If you have TRICARE or CHAMPVA, you must have Medicare Part B to keep these benefits.

If you have VA benefits, enrolling in Medicare is optional, but many like the additional providers, and locations that this allows.

If you’re still active duty or the spouse/dependent of someone who is, you don’t need Part B to keep your TRICARE.

What to watch out for

If you choose not to enroll in Medicare Part B due to your VA benefits, and decide you want it later, you will probably have to pay a penalty.

The longer you go without Medicare Part B when you’re eligible, the higher the penalty when you do enroll.

The QUIZ!

This quiz was designed to give you a score based on the qualities of each plan. Read each question carefully, and click submit (you will need to scroll down to view all 6 questions and click the submit button).